North Central Bancshares, Inc. Employment Agreement
North
Central Bancshares, Inc.
This
Employment
Agreement
("Agreement") made and entered into as of July 27, 2007 by and between
North
Central Bancshares, Inc.,
a
publicly held business corporation organized and operating under the laws
of the
State of Iowa and having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
("Holding Company") and ▇▇▇▇ ▇. ▇▇▇▇, an individual residing at ▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("▇▇. ▇▇▇▇").
W
i t n e s s e t h :
Whereas,
▇▇.
▇▇▇▇, effective June 11, 2007, currently serves First Federal Savings Bank
of
Iowa ("Bank") in the capacity of Chief Financial Officer; and
Whereas,
the
Bank is a wholly owned subsidiary of the Holding Company; and
Whereas,
the
Holding Company desires to employ ▇▇. ▇▇▇▇ in the capacity of Chief Financial
Officer and desires to assure for itself the services of ▇▇. ▇▇▇▇ for the
period
provided in this Agreement; and
Whereas,
▇▇.
▇▇▇▇ is willing to continue to serve the Holding Company on the terms and
conditions hereinafter set forth;
Now,
Therefore,
in
consideration of the premises and the mutual covenants and conditions
hereinafter set forth, the Holding Company and ▇▇. ▇▇▇▇ hereby agree as
follows:
Section
1. Employment.
The
Holding Company agrees to continue to employ ▇▇. ▇▇▇▇, and ▇▇. ▇▇▇▇ hereby
agrees to such continued employment, during the period and upon the terms
and
conditions set forth in this Agreement.
Section
2. Employment
Period; Remaining Unexpired Employment Period.
(a) The
terms
and conditions of this Agreement shall be and remain in effect during the
period
of employment established under this section 2 (“Employment Period”). The
Employment Period shall be for an initial term of three years beginning on
the
date of this Agreement (and ending on the third anniversary date of this
Agreement plus such extensions, if any, as are provided by the Board of
Directors of the Holding Company (“Board”) pursuant to section
2(b).)
(b) Beginning
on the date of this Agreement, the Employment Period shall automatically
be
extended for one (1) additional day each day, unless either the Holding Company
or ▇▇. ▇▇▇▇ elects not to extend the Agreement further by giving written
notice
to the other party in which case the Employment Period shall end on the third
anniversary of the date on which such written notice is given. For all purposes
of this Agreement, the term “Remaining Unexpired Employment Period” as of any
date shall mean the period beginning on such date and ending on: (i) if a
notice
of non-extension has been given in accordance with this section 2(b), the
third
anniversary of the date on which such notice is given; and (ii) in all other
cases, the third anniversary of the date as of which the Remaining Unexpired
Employment Period is being determined. Upon termination of ▇▇. ▇▇▇▇'▇ employment
with the Holding Company for any reason whatsoever, any daily extensions
provided pursuant to this section 2(b), if not therefore discontinued, shall
automatically cease.
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(c) Nothing
in this Agreement shall be deemed to prohibit the Holding Company at any
time
from terminating ▇▇. ▇▇▇▇'▇ employment during the Employment Period with
or
without notice for any reason; provided,
however,
that
the relative rights and obligations of the Holding Company and ▇▇. ▇▇▇▇ in
the
event of any such termination shall be determined under this
Agreement.
Section
3. Duties.
▇▇.
▇▇▇▇
shall serve as Chief Financial Officer of the Holding Company, having such
power, authority and responsibility and performing such duties as are prescribed
by or under the By-Laws of the Holding Company and as are customarily associated
with such position. ▇▇. ▇▇▇▇ shall devote his full business time and attention
(other than during weekends, holidays, approved vacation periods, and periods
of
illness or approved leaves of absence) to the business and affairs of the
Holding Company and shall use his best efforts to advance the interests of
the
Holding Company.
Section
4. Cash
Compensation.
In
consideration for the services to be rendered by ▇▇. ▇▇▇▇ hereunder, the
Holding
Company shall pay to him a salary no less than the rate in effect on the
date of
this agreement, payable in approximately equal installments in accordance
with
the Holding Company's customary payroll practices for senior officers. At
least
annually during the Employment Period, the Board shall review ▇▇. ▇▇▇▇'▇
annual
rate of salary and may, in its discretion, approve an increase therein. In
addition to salary, ▇▇. ▇▇▇▇ may receive other cash compensation from the
Holding Company for services hereunder at such times, in such amounts and
on
such terms and conditions as the Board may determine from time to time. In
the
event that ▇▇. ▇▇▇▇ receives a salary from the Bank in addition to or in
lieu of
a salary from the Holding Company, any reference herein to salary shall be
a
reference to the aggregate of the salaries paid or payable by the Bank and
the
Holding Company.
Section
5. Employee
Benefit Plans and Programs.
During
the Employment Period, ▇▇. ▇▇▇▇ shall be treated as an employee of the Holding
Company and shall be eligible to participate in and receive benefits under
any
and all qualified or non-qualified retirement, pension, savings, profit-sharing
or stock bonus plans, any and all group life, health (including hospitalization,
medical and major medical), dental, accident and long-term disability insurance
plans, and any other employee benefit and compensation plans (including,
but not
limited to, any incentive compensation plans or programs, stock option and
appreciation rights plans and restricted stock plans) as may from time to
time
be maintained by, or cover employees of, the Holding Company, in accordance
with
the terms and conditions of such employee benefit plans and programs and
compensation plans and programs and consistent with the Holding Company's
customary practices.
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Section
6. Indemnification
and Insurance.
(a) During
the Employment Period and until the expiration of the time provided by law
for
the commencement of any judicial or administrative proceeding on the basis
of
such service, the Holding Company shall cause ▇▇. ▇▇▇▇ to be covered by and
named as an insured under any policy or contract of insurance obtained by
it to
insure its directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of the Holding
Company or service in other capacities at the request of the Holding Company.
The coverage provided to ▇▇. ▇▇▇▇ pursuant to this section 6 shall be of
the
same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Holding Company.
(b) To
the
maximum extent permitted under applicable law, during the Employment Period
and
until the expiration of the time provided by law for the commencement of
any
judicial or administrative proceeding on the basis of such service, the Holding
Company shall indemnify, and shall cause its subsidiaries and affiliates
to
indemnify ▇▇. ▇▇▇▇ against and hold him harmless from any costs, liabilities,
losses and exposures to the fullest extent and on the most favorable terms
and
conditions that similar indemnification is offered to any director or officer
of
the Holding Company or any subsidiary or affiliate thereof. This section
6(b)
shall not be applicable where section 19 is applicable. [No indemnification
shall be paid that would violate 12 U.S.C. 1828(k) or any regulations
promulgated thereunder, or 12 C.F.R. 545.121.]
Section
7. Outside
Activities.
▇▇.
▇▇▇▇
may serve as a member of the boards of directors of such business, community
and
charitable organizations as he may disclose to and as may be approved by
the
Board (which approval shall not be unreasonably withheld); provided,
however,
that
such service shall not materially interfere with the performance of his duties
under this Agreement. ▇▇. ▇▇▇▇ may also engage in personal business and
investment activities which do not materially interfere with the performance
of
his duties hereunder, provided,
however,
that
such activities are not prohibited under any code of conduct or investment
or
securities trading policy established by the Holding Company and generally
applicable to all similarly situated executives. ▇▇. ▇▇▇▇ may also serve
as an
officer or director of the Bank on such terms and conditions as the Holding
Company and the Bank may mutually agree upon, and such service shall not
be
deemed to materially interfere with ▇▇. ▇▇▇▇'▇ performance of his duties
hereunder or otherwise result in a material breach of this
Agreement.
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Section
8. Working
Facilities and Expenses.
▇▇.
▇▇▇▇'▇ principal place of employment shall be at the Bank’s office at ▇▇▇ ▇.
▇▇▇▇
▇▇.,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or at such other location as the Holding Company
and ▇▇. ▇▇▇▇ may mutually agree upon. The Holding Company shall provide ▇▇.
▇▇▇▇
at his principal place of employment with a private office, secretarial
services, and other support services and facilities suitable to his position
with the Holding Company and necessary or appropriate in connection with
the
performance of his assigned duties under this Agreement. The Holding Company
shall reimburse ▇▇. ▇▇▇▇ for his ordinary and necessary business expenses,
including, without limitation, mileage reimbursement at the official current
IRS
mileage reimbursement rate for business use of his personal automobile, fees
for
memberships in such clubs and organizations as ▇▇. ▇▇▇▇ and the Holding Company
shall mutually agree are necessary and appropriate for business purposes,
and
his travel and entertainment expenses incurred in connection with the
performance of his duties under this Agreement, in each case upon presentation
to the Holding Company of an itemized account of such expenses in such form
as
the Holding Company may reasonably require.
Section
9. Termination
of Employment with Severance Benefits
(a) ▇▇.
▇▇▇▇
shall be entitled to the severance benefits described herein in the event
that
his employment with the Holding Company terminates during the Employment
Period
under any of the following circumstances:
(i) ▇▇.
▇▇▇▇'▇ voluntary resignation from employment with the Holding Company within
ninety (90) days following:
(A) the
failure of the Board to appoint or re-appoint or elect or re-elect ▇▇. ▇▇▇▇
to
the office of Chief Financial Officer (or a more senior office) of the Holding
Company;
(B) the
failure of the stockholders of the Holding Company to elect or re-elect ▇▇.
▇▇▇▇
or the failure of the Board (or the nominating committee thereof) to nominate
▇▇. ▇▇▇▇ for such election or re-election;
(C) the
expiration of a thirty (30) day period following the date on which ▇▇. ▇▇▇▇
gives written notice to the Holding Company of its material failure, whether
by
amendment of the Holding Company's Articles of Incorporation or By-laws,
action
of the Board or the Holding Company's stockholders or otherwise, to vest
in ▇▇.
▇▇▇▇ the functions, duties, or responsibilities prescribed in section 3 of
this
Agreement, unless, during such thirty (30) day period, the Holding Company
fully
cures such failure in a manner determined by ▇▇. ▇▇▇▇, in his discretion,
to be
satisfactory; or
(D) the
expiration of a thirty (30) day period following the date on which ▇▇. ▇▇▇▇
gives written notice to the Holding Company of its material breach of any
term,
condition or covenant contained in this Agreement (including, without limitation
any reduction of ▇▇. ▇▇▇▇'▇ rate of base salary in effect from time to time
and
any change in the terms and conditions of any compensation or benefit program
in
which ▇▇. ▇▇▇▇ participates which, either individually or together with other
changes, has a material adverse effect on the aggregate value of his total
compensation package), unless, during such thirty (30) day period, the Holding
Company fully cures such failure; or
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(ii) the
termination of ▇▇. ▇▇▇▇'▇ employment with the Holding Company for any other
reason not described in section 10(a).
In
such
event, then, the Holding Company shall provide the benefits and pay to ▇▇.
▇▇▇▇
the amounts described in section 9(b).
(b) Upon
the
termination of ▇▇. ▇▇▇▇'▇ employment with the Holding Company under
circumstances described in section 9(a) of this Agreement, the Holding Company
shall pay and provide to ▇▇. ▇▇▇▇ (or, in the event of his death, to his
estate):
(i) his
earned but unpaid compensation as of the date of the termination of his
employment with the Holding Company, such payment to be made at the time
and in
the manner prescribed by law applicable to the payment of wages;
(ii) the
benefits, if any, to which he is entitled as a former employee under the
employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Holding Company's officers and
employees;
(iii) continued
group life, health (including hospitalization, medical and major medical),
dental, accident and long-term disability insurance benefits, in addition
to
that provided pursuant to section 9(b)(ii), and after taking into account
the
coverage provided by any subsequent employer, if and to the extent necessary
to
provide for ▇▇. ▇▇▇▇, for the Remaining Unexpired Employment Period, coverage
equivalent to the coverage to which he would have been entitled under such
plans
(as in effect on the date of his termination of employment, or, if his
termination of employment occurs after a Change of Control, on the date of
such
Change of Control, whichever benefits are greater), if he had continued working
for the Holding Company during the Remaining Unexpired Employment Period
at the
highest annual rate of compensation achieved during that portion of the
Employment Period which is prior to ▇▇. ▇▇▇▇'▇ termination of employment
with
the Holding Company;
(iv) thirty
(30) days following his termination of employment with the Holding Company,
a
lump sum payment, in an amount equal to the present value of the salary that
▇▇.
▇▇▇▇ would have earned if he had continued working for the Holding Company
during the Remaining Unexpired Employment Period at the highest annual rate
of
salary achieved during that portion of the Employment Period which is prior
to
▇▇. ▇▇▇▇'▇ termination of employment with the Holding Company, where such
present value is to be determined using a discount rate equal to the applicable
short-term federal rate prescribed under section 1274(d) of the Internal
Revenue
Code of 1986 ("Code") (the “Short Term AFR”), compounded using the compounding
period corresponding to the Holding Company's regular payroll periods for
its
officers, such lump sum to be paid in lieu of all other payments of salary
provided for under this Agreement in respect of the period following any
such
termination;
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(v) thirty
(30) days following his termination of employment with the Holding Company,
a
lump sum payment in an amount equal to the product of (A) the Bank’s “normal
cost” for its tax-qualified defined benefit plan for the most recently completed
fiscal year of the plan (expressed as a percentage of the compensation
recognized in the plan’s benefit formula and determined by, or on the basis of
information furnished by, the plan’s actuary), multiplied by (B) the amount
payable under section 9(b)(iv);
(vi) within
thirty (30) days following his termination of employment with the Holding
Company, a lump sum payment in an amount equal to the present value of the
additional employer contributions (or if greater in the case of a leveraged
employee stock ownership plan or similar arrangement, the additional assets
allocable to him through debt service, based on the fair market value of
such
assets at termination of employment) to which he would have been entitled
under
any and all qualified and non-qualified defined contribution plans maintained
by, or covering employees of, the Holding Company, if he were 100% vested
thereunder and had continued working for the Holding Company during the
Remaining Unexpired Employment Period at the highest annual rate of compensation
achieved during that portion of the Employment Period which is prior to ▇▇.
▇▇▇▇'▇ termination of employment with the Holding Company, and making the
maximum amount of employee contributions, if any, required under such plan
or
plans, such present value to be determined on the basis of a discount rate,
compounded using the compounding period that corresponds to the frequency
with
which employer contributions are made to the relevant plan, equal to the
Short
Term AFR;
(vii) the
payments that would have been made to ▇▇. ▇▇▇▇ under any cash bonus or long-term
or short-term cash incentive compensation plan maintained by, or covering
employees of, the Holding Company if he had continued working for the Holding
Company during the Remaining Unexpired Employment Period and had earned the
maximum bonus or incentive award in each calendar year that ends during the
Remaining Unexpired Employment Period, each annual payment to be equal to
the
product of:
(A) the
maximum percentage rate at which an award was ever available to ▇▇. ▇▇▇▇
under
such incentive compensation plan; multiplied by
(B) the
salary that would have been paid to ▇▇. ▇▇▇▇ during each such calendar year
at
the highest annual rate of salary achieved during that portion of the Employment
Period which is prior to ▇▇. ▇▇▇▇'▇ termination of employment with the Holding
Company;
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where
such payments are to be made (without discounting for early payment) thirty
(30)
days following ▇▇. ▇▇▇▇'▇ termination of employment;
(viii)
▇▇. ▇▇▇▇ shall be deemed fully vested in all options and appreciation rights
under any stock option or appreciation rights plan or program maintained
by, or
covering employees of, the Holding Company, even if he is not vested under
such
plan or program;
(ix) ▇▇.
▇▇▇▇
shall be deemed fully vested in all shares awarded under any restricted stock
plan maintained by, or covering employees of, the Holding Company, even if
he is
not vested under such plan.
The
Holding Company and ▇▇. ▇▇▇▇ hereby stipulate that the damages which may
be
incurred by ▇▇. ▇▇▇▇ following any such termination of employment are not
capable of accurate measurement as of the date first above written and that
the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement
of
proof of actual damage and without regard to ▇▇. ▇▇▇▇'▇ efforts, if any,
to
mitigate damages. The Holding Company and ▇▇. ▇▇▇▇ further agree that the
Holding Company may condition the payments and benefits (if any) due under
sections 9(b)(iii), (iv), (v), (vi) and (vii) on the receipt, not later than
thirty (30) days after termination of employment, of ▇▇. ▇▇▇▇'▇ resignation
from
any and all positions which he holds as an officer, director or committee
member
with respect to the Holding Company, the Bank or any subsidiary or affiliate
of
either of them; provided that the Holding Company requests such resignations
in
writing not later than twenty (20) days after termination of
employment.
Section
10. Termination
without Additional Holding Company Liability.
(a) In
the
event that ▇▇. ▇▇▇▇'▇ employment with the Holding Company shall terminate
during
the Employment Period on account of:
(i) the
discharge of ▇▇. ▇▇▇▇ for "cause," which, for purposes of this Agreement
shall
mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease and desist order, or any material breach
of
this Agreement, in each case as measured against standards generally prevailing
at the relevant time in the savings and community banking industry; provided,
however,
that ▇▇.
▇▇▇▇ shall not be deemed to have been discharged for cause unless and until
he
shall have received a written notice of termination from the Board, accompanied
by a resolution duly adopted by affirmative vote of a majority of the entire
Board at a meeting called and held for such purpose (after reasonable notice
to
▇▇. ▇▇▇▇ and a reasonable opportunity for ▇▇. ▇▇▇▇ to make oral and written
presentations to the members of the Board, on his own behalf, or through
a
representative, who may be his legal counsel, to refute the grounds for the
proposed determination) finding that in the good faith opinion of the Board
grounds exist for discharging ▇▇. ▇▇▇▇ for cause; or
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(ii) ▇▇.
▇▇▇▇'▇ voluntary resignation from employment with the Bank for reasons other
than those specified in section 9(a)(i) or section 11(b);
(iii) ▇▇.
▇▇▇▇'▇ death; or
(iv) a
determination that ▇▇. ▇▇▇▇ is eligible for long-term disability benefits
under
the Bank's long-term disability insurance program or, if there is no such
program, under the federal Social Security Act;
then
the
Holding Company shall have no further obligations under this Agreement, other
than the payment to ▇▇. ▇▇▇▇ (or, in the event of his death, to his estate)
of
his earned but unpaid compensation as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which he
is
entitled as a former employee under the employee benefit plans and programs
and
compensation plans and programs maintained by, or covering employees of,
the
Holding Company.
Section
11. Termination
Upon or Following a Change of Control.
(a) A
Change
of Control of the Holding Company ("Change of Control") shall be deemed to
have
occurred upon the happening of any of the following events:
(i) approval
by the stockholders of the Holding Company of a transaction that would result
in
the reorganization, merger or consolidation of the Holding Company with one
or
more other persons, other than a transaction following which:
(A) at
least
51% of the equity ownership interests of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) in substantially the same relative proportions by
persons who, immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51%
of
the outstanding equity ownership interests in the Holding Company;
and
(B) at
least
51% of the securities entitled to vote generally in the election of directors
of
the entity resulting from such transaction are beneficially owned (within
the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially
the
same relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote generally in
the
election of directors of the Holding Company;
(ii) the
acquisition of all or substantially all of the assets of the Holding Company
or
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the
Exchange Act) of 20% or more of the outstanding securities of the Holding
Company entitled to vote generally in the election of directors by any person
or
by any persons acting in concert, or approval by the stockholders of the
Holding
Company of any transaction which would result in such an acquisition;
or
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(iii) a
complete liquidation or dissolution of the Holding Company, or approval by
the
stockholders of the Holding Company of a plan for such liquidation or
dissolution; or
(iv) the
occurrence of any event if, immediately following such event, at least 50%
of
the members of the board of directors of the Holding Company do not belong
to
any of the following groups:
(A) individuals
who were members of the Board of the Holding Company on the date of this
Agreement; or
(B) individuals
who first became members of the Board of the Holding Company after the date
of
this Agreement either:
(I) upon
election to serve as a member of the Board of the Holding Company by affirmative
vote of three-quarters of the members of such board, or of a nominating
committee thereof, in office at the time of such first election; or
(II) upon
election by the stockholders of the Holding Company to serve as a member
of the
Board of the Holding Company, but only if nominated for election by affirmative
vote of three-quarters of the members of the Board of the Holding Company,
or of
a nominating committee thereof, in office at the time of such first
nomination;
provided,
however,
that
such individual's election or nomination did not result from an actual or
threatened election contest (within the meaning of Rule 14a-11 of Regulation
14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of the Board
of
the Holding Company; or
(v) any
event
which would be described in section 11(a)(i), (ii), (iii) or (iv) if the
term
"Bank" were substituted for the term "Holding Company" therein.
In
no
event, however, shall a Change of Control be deemed to have occurred as a
result
of any acquisition of securities or assets of the Holding Company, the Bank,
or
any affiliate or subsidiary of either of them, by the Holding Company, the
Bank,
or any affiliate or subsidiary of either of them, or by any employee benefit
plan maintained by any of them. For purposes of this section 11(a), the term
"person" shall have the meaning assigned to it under sections 13(d)(3) or
14(d)(2) of the Exchange Act.
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(b) In
the
event of a Change of Control, ▇▇. ▇▇▇▇ shall be entitled to the payments
and
benefits contemplated by section 9(b) in the event of his termination employment
with the Holding Company under any of the circumstances described in section
9(a) of this Agreement or under any of the following circumstances:
(i) resignation,
voluntary or otherwise, by ▇▇. ▇▇▇▇ at any time during the Employment Period
and
within ninety (90) days following his demotion, loss of title, office or
significant authority or responsibility, or following any reduction in any
element of his package of compensation and benefits;
(ii) resignation,
voluntary or otherwise, by ▇▇. ▇▇▇▇ at any time during the Employment Period
and
within ninety (90) days following any relocation of his principal place of
employment or any change in working conditions at such principal place of
employment which is embarrassing, derogatory or otherwise adverse;
(iii) resignation,
voluntary or otherwise, by ▇▇. ▇▇▇▇ at any time during the Employment Period
following the failure of any successor to the Holding Company in the Change
of
Control to include ▇▇. ▇▇▇▇ in any compensation or benefit program maintained
by
it or covering any of its executive officers, unless ▇▇. ▇▇▇▇ is already
covered
by a substantially similar plan of the Holding Company which is at least
as
favorable to him; or
(iv) resignation,
voluntary or otherwise, for any reason whatsoever following the expiration
of a
transition period of thirty days beginning on the effective date of the Change
of Control (or such longer period, not to exceed ninety (90) days beginning
on
the effective date of the Change in Control, as the Bank or its successor
may
reasonably request) to facilitate a transfer of management
responsibilities.
Section
12. Maximum
Limitations on Severance Benefits.
Notwithstanding
anything in this Agreement to the contrary, if (a) the making of payments
and
the provision of benefits to ▇▇. ▇▇▇▇ under this Agreement would cause ▇▇.
▇▇▇▇
to be subject to the excise tax imposed under section 4999 of the Code and
(b)
the limitation of ▇▇. ▇▇▇▇'▇ payments and benefits to the maximum amount
permitted without the imposition of the excise tax imposed under section
4999 of
the Code would require a reduction in payments and benefits that is less
than or
equal to the excise tax that otherwise would be imposed, then the payments
and
benefits made to ▇▇. ▇▇▇▇ under this Agreement shall be limited, in such
manner
as ▇▇. ▇▇▇▇, in his discretion, may determine, to the maximum amount that
may be
paid without resulting in the imposition of an excise tax under section 4999
of
the Code.
Page
10
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Section
13. Covenant
Not to Compete.
▇▇.
▇▇▇▇
hereby covenants and agrees that, in the event of his termination of employment
with the Holding Company prior to the expiration of the Employment Period,
for a
period of one (1) year following the date of his termination of employment
with
the Holding Company (or, if less, for the Remaining Unexpired Employment
Period), he shall not, without the written consent of the Holding Company,
become an officer, employee, consultant, director or trustee of any savings
bank, savings and loan association, savings and loan holding company, bank
or
bank holding company, or any direct or indirect subsidiary or affiliate of
any
such entity, that entails working in any city, town or county in which the
Bank
or the Holding Company has an office or has filed an application for regulatory
approval to establish an office, determined as of the effective date of ▇▇.
▇▇▇▇'▇ termination of employment; provided,
however,
that
this section 13 shall not apply if ▇▇. ▇▇▇▇'▇ employment is terminated for
the
reasons set forth in section 9(a) or section 11(b); and provided, further,
that
if ▇▇. ▇▇▇▇'▇ employment shall be terminated on account of disability as
provided in section 10(d) of this Agreement, this section 13 shall not prevent
▇▇. ▇▇▇▇ from accepting any position or performing any services if (a) he
first
offers, by written notice, to accept a similar position with, or perform
similar
services for, the Holding Company on substantially the same terms and conditions
and (b) the Holding Company declines to accept such offer within ten (10)
days
after such notice is given. If ▇▇. ▇▇▇▇ resigns voluntarily with advance
written
notice, any period of employment with the Holding Company after giving notice
and before the effective date of his termination of employment shall count
as a
part of the non-compete period.
Section
14. Confidentiality.
Unless
he
obtains the prior written consent of the Holding Company, ▇▇. ▇▇▇▇ shall
keep
confidential and shall refrain from using for the benefit of himself, or
any
person or entity other than the Holding Company or any entity which is a
subsidiary of the Holding Company or of which the Holding Company is a
subsidiary, any material document or information obtained from the Holding
Company, or from its parent or subsidiaries, in the course of his employment
with any of them concerning their properties, operations or business (unless
such document or information is readily ascertainable from public or published
information or trade sources or has otherwise been made available to the
public
through no fault of his own) until the same ceases to be material (or becomes
so
ascertainable or available); provided,
however,
that
nothing in this section 14 shall prevent ▇▇. ▇▇▇▇, with or without the Holding
Company's consent, from participating in or disclosing documents or information
in connection with any judicial or administrative investigation, inquiry
or
proceeding to the extent that such participation or disclosure is required
under
applicable law.
Section
15. Solicitation.
▇▇.
▇▇▇▇
hereby covenants and agrees that, for a period of one (1) year following
his
termination of employment with the Holding Company, he shall not, without
the
written consent of the Holding Company, either directly or
indirectly:
(a) solicit,
offer employment to, or take any other action intended, or that a reasonable
person acting in like circumstances would expect, to have the effect of causing
any officer or employee of the Holding Company, the Bank or any affiliate,
as of
the date of this Agreement, of either of them, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any savings bank, savings
and
loan association, bank, bank holding company, savings and loan holding company,
or other institution engaged in the business of accepting deposits and making
loans, doing business in any city, town or county in which the Bank or the
Holding Company has an office or has filed an application for regulatory
approval to establish an office, determined as of the date of this
Agreement;
Page
11
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(b) provide
any information, advice or recommendation with respect to any such officer
or
employee of any savings bank, savings and loan association, bank, bank holding
company, savings and loan holding company, or other institution engaged in
the
business of accepting deposits and making loans, doing business in any city,
town or county in which the Bank or the Holding Company has an office or
has
filed an application for regulatory approval to establish an office, determined
as of the date of this Agreement, that is intended, or that a reasonable
person
acting in like circumstances would expect, to have the effect of causing
any
officer or employee of the Holding Company, the Bank, or any affiliate, as
of
the date of this Agreement, of either of them, to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, such savings bank, savings
and
loan association, bank, bank holding company, savings and loan holding company,
or other institution engaged in the business of accepting deposits and making
loans; or
(c) solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would
expect,
to have the effect of causing any customer of the Holding Company to terminate
an existing business or commercial relationship with the Holding Company.
If
▇▇.
▇▇▇▇ resigns voluntarily with advance written notice, any period of employment
with the Holding Company after giving notice and before the effective date of
his termination of employment shall count as part of the non-solicitation
period.
Section
16. No
Effect on Employee Benefit Plans or Programs.
The
termination of ▇▇. ▇▇▇▇'▇ employment during the term of this Agreement or
thereafter, whether by the Holding Company or by ▇▇. ▇▇▇▇, shall have no
effect
on the rights and obligations of the parties hereto under the Holding Company's
qualified or non-qualified retirement, pension, savings, thrift, profit-sharing
or stock bonus plans, group life, health (including hospitalization, medical
and
major medical), dental, accident and long-term disability insurance plans
or
such other employee benefit plans or programs, or compensation plans or
programs, as may be maintained by, or cover employees of, the Holding Company
from time to time.
Section
17. Successors
and Assigns.
This
Agreement will inure to the benefit of and be binding upon ▇▇. ▇▇▇▇, his
legal
representatives and testate or intestate distributees, and the Holding Company
and its successors and assigns, including any successor by merger or
consolidation or any other person or firm or corporation to which all or
substantially all of the assets and business of the Holding Company may be
sold
or otherwise transferred. Failure of the Holding Company to obtain from any
successor its express written assumption of the Holding Company's obligations
hereunder at least sixty (60) days in advance of the scheduled effective
date of
any such succession shall be deemed a material breach of this Agreement unless
cured within ten (10) days after notice thereof by ▇▇. ▇▇▇▇ to the Holding
Company.
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12
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Section
18. Notices.
Any
communication required or permitted to be given under this Agreement, including
any notice, direction, designation, consent, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as
it is
delivered personally, or five (5) days after mailing if mailed, postage prepaid,
by registered or certified mail, return receipt requested, addressed to such
party at the address listed below or at such other address as one such party
may
by written notice specify to the other party:
If
to ▇▇.
▇▇▇▇:
▇▇.
▇▇▇▇
▇. ▇▇▇▇
[ ]
[ ]
If
to the
Holding Company:
North
Central Bancshares, Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate
Secretary
with
a copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Wood LLP
Two
World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
W.
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Section
19. Indemnification
for Attorneys' Fees.
From
and
after the earliest date on which a Change of Control occurs, the Holding
Company
shall indemnify, hold harmless and defend ▇▇. ▇▇▇▇ against reasonable costs,
including legal fees, incurred by him in connection with or arising out of
any
action, suit or proceeding in which he may be involved, as a result of his
efforts, in good faith, to defend or enforce the terms of this Agreement;
provided,
however,
that ▇▇.
▇▇▇▇ shall have substantially prevailed on the merits pursuant to a judgment,
decree or order of a court of competent jurisdiction or of an arbitrator
in an
arbitration proceeding, or in a settlement. For purposes of this Agreement,
any
settlement agreement which provides for payment of any amounts in settlement
of
the Holding Company's obligations hereunder shall be conclusive evidence
of ▇▇.
▇▇▇▇'▇ entitlement to indemnification hereunder, and any such indemnification
payments shall be in addition to amounts payable pursuant to such settlement
agreement, unless such settlement agreement expressly provides
otherwise.
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Section
20. Severability.
A
determination that any provision of this Agreement is invalid or unenforceable
shall not affect the validity or enforceability of any other provision
hereof.
Section
21. Waiver.
Failure
to insist upon strict compliance with any of the terms, covenants or conditions
hereof shall not be deemed a waiver of such term, covenant, or condition.
A
waiver of any provision of this Agreement must be made in writing, designated
as
a waiver, and signed by the party against whom its enforcement is sought.
Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of such right or power
at
any other time or times.
Section
22. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, each of which
shall
be deemed an original, and all of which shall constitute one and the same
Agreement.
Section
23. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
federal laws of the United States and, to the extent that federal law is
inapplicable, in accordance with the laws of the State of Iowa applicable
to
contracts entered into and to be performed entirely within the State of
Iowa.
Section
24. Headings
and Construction.
The
headings of sections in this Agreement are for convenience of reference only
and
are not intended to qualify the meaning of any section. Any reference to
a
section number shall refer to a section of this Agreement, unless otherwise
stated.
Section
25. Entire
Agreement; Modifications.
This
instrument contains the entire agreement of the parties relating to the subject
matter hereof, and supersedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof.
No
modifications of this Agreement shall be valid unless made in writing and
signed
by the parties hereto.
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14
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Section
26. Guarantee.
The
Holding Company hereby guarantees the payment by the Bank of any benefits
and
compensation to which ▇▇. ▇▇▇▇ is or may be entitled to under the terms and
conditions of the employment agreement dated as of the 27th day of
July, 2007 between the Bank and ▇▇. ▇▇▇▇, a copy of which is attached hereto
as
Exhibit A ("Bank Agreement").
Section
27. Non-duplication.
In
the
event that ▇▇. ▇▇▇▇ shall perform services for the Bank or any other direct
or
indirect subsidiary of the Holding Company, any compensation or benefits
provided to ▇▇. ▇▇▇▇ by such other employer shall be applied to offset the
obligations of the Holding Company hereunder, it being intended that this
Agreement set forth the aggregate compensation and benefits payable to ▇▇.
▇▇▇▇
for all services to the Holding Company and all of its direct or indirect
subsidiaries.
Section
28. Survival.
The
provisions of sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 26,
29 and
30 shall survive the expiration of the Employment Period or termination of
this
Agreement.
Section
29. Equitable
Remedies.
The
Holding Company and ▇▇. ▇▇▇▇ hereby stipulate that money damages are an
inadequate remedy for violations of sections 6(a), 13, 14 or 15 of this
Agreement and agree that equitable remedies, including, without limitations,
the
remedies of specific performance and injunctive relief, shall be available
with
respect to the enforcement of such provisions.
Section
30. Required
Regulatory Provisions.
The
following provisions are included for the purposes of complying with various
laws, rules and regulations applicable to the Holding Company:
(a) Notwithstanding
anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to ▇▇. ▇▇▇▇ under section 9(b) hereof (exclusive
of amounts described in section 9(b)(i), (viii) and (ix)) exceed the value
of
three times ▇▇. ▇▇▇▇'▇ average annual total compensation for the last five
consecutive calendar years to end prior to his termination of employment
with
the Holding Company (or for his entire period of employment with the Holding
Company if less than five calendar years).
(b) Notwithstanding
anything herein contained to the contrary, any payments to ▇▇. ▇▇▇▇ by the
Holding Company, whether pursuant to this Agreement or otherwise, are subject
to
and conditioned upon their compliance with section 18(k) of the Federal Deposit
Insurance Act ("FDI Act"), 12 U.S.C. §1828(k), and Federal Deposit Insurance
Corporation regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.
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(c) Notwithstanding
anything herein contained to the contrary, if ▇▇. ▇▇▇▇ is suspended and/or
temporarily prohibited from participating in the conduct of the affairs of
the
Holding Company pursuant to a notice served under section 8(e)(3) or 8(g)(1)
of
the FDI Act (12 U.S.C. §1818(e)(3) or 1818(g)(1)), the Holding Company's
obligations under this Agreement shall be suspended as of the date of service
of
such notice, unless stayed by appropriate proceedings. If the charges in
such
notice are dismissed, the Holding Company, in its discretion, may (i) pay
to ▇▇.
▇▇▇▇ all or part of the compensation withheld while the Holding Company's
obligations hereunder were suspended and (ii) reinstate, in whole or in part,
any of the obligations which were suspended.
(d) Notwithstanding
anything herein contained to the contrary, if ▇▇. ▇▇▇▇ is removed and/or
permanently prohibited from participating in the conduct of the Holding
Company's affairs by an order issued under section 8(e)(4) or 8(g)(1) of
the FDI
Act (12 U.S.C. §1818(e)(4) or (g)(1)), all obligations of the Holding Company
under this Agreement shall terminate as of the effective date of the order,
but
vested rights of the Holding Company and ▇▇. ▇▇▇▇ shall not be
affected.
(e) Notwithstanding
anything herein contained to the contrary, if the Holding Company is in default
(as defined in section 3(x)(1) of the FDI Act), all obligations under this
Agreement shall terminate as of the date of default, but vested rights of
the
Holding Company and ▇▇. ▇▇▇▇ shall not be affected.
(f) Notwithstanding
anything herein contained to the contrary, all obligations under this Agreement
shall be terminated, except to the extent determined that continuation of
this
Agreement is necessary for the continued operation of the Holding Company:
(i)
by the Director of the Office of Thrift Supervision ("OTS") or his designee,
at
the time the Federal Deposit Insurance Corporation enters into an agreement
to
provide assistance to or on behalf of the Holding Company under the authority
contained in section 13(c) of the FDI Act; or (ii) by the Director of the
OTS or
his designee at the time such Director or designee approves a supervisory
merger
to resolve problems related to the operation of the Holding Company or when
the
Holding Company is determined by such Director to be in an unsafe or unsound
condition. The vested rights of the parties shall not be affected by such
action.
If
and to
the extent that any of the foregoing provisions is not, or shall cease to
be,
required by
applicable law, rule or regulation, the same shall become inoperative in
the
case of the Holding Company as though eliminated by formal amendment of this
Agreement.
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Section
31. Section
409A of the Internal Revenue Code.
▇▇.
▇▇▇▇
and the
Holding Company acknowledge that each of the payments and benefits promised
to
▇▇. ▇▇▇▇
under
this Agreement must either comply with the requirements of Section 409A of
the
Code ("Section 409A") and the regulations thereunder or qualify for an exception
from compliance. To that end, ▇▇. ▇▇▇▇
and the
Holding Company agree that (a) the payment described in Section 9(b)(i) is
intended to be exempt from Section 409A pursuant to Treasury Regulation section
1.409A-1(b)(3) as payment made pursuant to the Holding Company’s customary
payment timing arrangement;
and (b)
the welfare benefits provided in kind under section 9(b)(iii) are intended
to be
exempt from Section 409A as welfare benefits pursuant to Treasury Regulation
Section 1.409A-1(a)(5) and/or as benefits not includible in gross income.
In the
case of a payment that is not exempt from Section 409A, the payment shall
not be
made prior to, and shall, if necessary, be deferred (with interest at the
annual
rate of 6%, compounded monthly from the date of ▇▇. ▇▇▇▇’▇
termination of employment to the date of actual payment) to and paid on the
later of the earliest date on which ▇▇. ▇▇▇▇
experiences a separation from service (within the meaning of Treasury Regulation
Section 1.409A-1(h)) and, if ▇▇. ▇▇▇▇
is a
specified employee (within the meaning of Treasury Regulation Section
1.409A-1(i)) on the date of his separation from service, the first day of
the
seventh month following ▇▇. ▇▇▇▇’▇
separation from service. Furthermore, this Agreement shall be construed and
administered in such manner as shall be necessary to effect compliance with
Section 409A and shall be subject to amendment in the future, in such manner
as
the Holding Company may deem necessary or appropriate to effect such compliance;
provided that any such amendment shall preserve for ▇▇. ▇▇▇▇
the
present value of the payments due under this Agreement.
In
Witness Whereof,
the
Holding Company has caused this Agreement to be executed and ▇▇. ▇▇▇▇ has
hereunto set his hand, all as of the day and year first above
written.
| /s/ ▇▇▇▇ ▇. ▇▇▇▇ | |
| ▇▇▇▇ ▇. ▇▇▇▇ |
|
ATTEST:
|
North
Central Bancshares, Inc.
|
|||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
Secretary
|
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
|
|
Title: President and CEO | |||
|
[Seal]
|
||||
Page
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STATE
OF
IOWA
)
:
ss.:
COUNTY
OF
POLK )
On
this
__________ day of ___________, 2007, before me personally came ▇▇▇▇ ▇. ▇▇▇▇,
to
me known, and known to me to be the individual described in the foregoing
instrument, who, being by me duly sworn, did depose and say that he resides
at
the address set forth in said instrument, and that he signed his name to
the
foregoing instrument.
|
Notary
Public
|
STATE
OF
IOWA
)
:
ss.:
COUNTY
OF
POLK )
On
this
__________ day of _______________, 2007, before me personally came
________________________, to me known, who, being by me duly sworn, did depose
and say that he resides at
________________________________________________________, that he is the
__________________________________ of North
Central Bancshares, Inc.,
the
Iowa corporation described in and which executed the foregoing instrument;
that
he knows the seal of said corporation; that the seal affixed to said instrument
is such seal; that it was so affixed by order of the Board of Directors of
said
corporation; and that he signed his name thereto by like order.
|
Notary
Public
|
Page
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